Williams: Minimum wage increases cost jobs, speed automotion process

There’s little debate among academic economists about the effect of minimum wages. University of California, Irvine economist David Neumark has examined more than 100 major academic studies on the minimum wage. He reports 85 percent of the studies “find a negative employment effect on low-skilled workers.”

A 1976 American Economic Association survey found 90 percent of its members agreed increasing the minimum wage raises unemployment among young and unskilled workers. A 1990 survey reported in the American Economic Review (1992) found 80 percent of economists agreed with the statement that increases in the minimum wage cause unemployment among the youth and low-skilled.

If you’re searching for a consensus in a field of study, most of the time you can examine the field’s introductory and intermediate college textbooks. Economics textbooks that mention the minimum wage say it increases unemployment for the least skilled worker. The only significant debate about the minimum wage is the magnitude of its effect. Some studies argue a 10 percent increase in the minimum wage will cause a 1 percent increase in unemployment, whereas others predict a higher increase.

How about the politics of the minimum wage? In the political arena, one dumps on people who can’t dump back on him. Minimum wages have their greatest unemployment impact on the least skilled worker. After all, who’s going to pay a worker an hourly wage of $10 if that worker is so unfortunate as to have skills that enable him to produce only $5 worth of value per hour?

Who are these workers? For the most part, they are low-skilled teens or young adults, most of whom are poorly educated blacks and Latinos. The unemployment statistics in our urban areas confirm this prediction, with teen unemployment rates as high as 50 percent.

The politics of the minimum wage are simple. No congressman or president owes his office to the poorly educated black and Latino youth vote. Moreover, the victims of the minimum wage do not know why they suffer high unemployment, and neither do most of their “benefactors.”

Minimum wage beneficiaries are highly organized, and they do have the necessary political clout to get Congress to price their low-skilled competition out of the market so they can demand higher wages.

Concerned about the devastating unemployment effects of the minimum wage, Republican politicians have long resisted increases in the minimum wage, but that makes no political sense. The reason is the beneficiaries of preventing increases in the minimum wage don’t vote Republican no matter what; where’s the political quid pro quo?

Higher-skilled and union workers are not the only beneficiaries of higher minimum wages. Among other beneficiaries are manufacturers who produce substitutes for workers. A recent example of this is the Wawa stores’ experiment with customers using touch screens as substitutes for counter clerks. A customer at the convenience store selects his order from a touch screen. He takes a printed slip to the cashier to pay for it while it’s being filled. I imagine that soon the customer’s interaction with the cashier will be eliminated with a swipe of a credit card. Raising the minimum wage and other employment costs speeds up the automation process.

I’m old enough to remember attendants at gasoline stations and theater ushers, who are virtually absent today. It’s not because today’s Americans like to smell gasoline fumes and stumble down the aisles in the dark to find their seat. The minimum wage law has eliminated such jobs.

Finally, there’s a nastier side to support for minimum wage laws, documented in my book “Race and Economics: How Much Can Be Blamed on Discrimination?” During South Africa’s apartheid era, racist labor unions were the country’s major supporters of minimum wage laws for blacks.

Their stated intention was to protect white workers from having to compete with lower-wage black workers. Our nation’s first minimum wage law, the Davis-Bacon Act of 1931, had racist motivation. Among the widespread racist sentiment was that of American Federation of Labor President William Green, who complained, “Colored labor is being sought to demoralize wage rates.”

WALTER E. WILLIAMS is a professor of economics at George Mason University. His column is distributed by Creators Syndicate, 5777 W. Century Blvd., Suite 700, Los Angeles, CA 90045.

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I mean, how can he look himself in the mirror. Conservative outlets who peddle Williams' smut must depend on their audiences not to know who David Neumark is. I cracked up when Williams claims that of the 100 studies Neumark read, 85 of them agreed with his debunked claims.

Williams misrepresents who these workers are. 88% of those making less than 10 dollars an hour are adults. 44% have atleast some college education. The typical worker that would be effected by a minimum wage increase brings home half of their families earnings.

In the 1960s the minimum wage was higher than it is today in real terms, even while overall hours and labor productivity were lower.

95 percent of the economic gains since the recovery continue to go to the wealthiest 1 percent. Getting back to the shared equality we thought normal over thirty years ago before Reagan will require major changes.

And you've got Walmart owned by a family who inherited it, but nonetheless, they are collectively worth over a 150 billion dollars. You would think that rather than pay their employees unlivable wages while redirecting them to food stamps, they could pay a livable wage. They could pay a livible wage rather than have us, the tax payer, subsidize the Walton family fortune. They could also afford to pay a livible wage rather than continueing to buy back their stock.

Henry Ford decided to pay his workers three times the average at that time, a hundred years ago. He knew that if his employees did better, the company did better. Walmart and profitable fast food corporations could stand to learn something from Henry Ford.

In fact there are studies showing how Walmart as a company would benefit from raising wages as well their workers.

There is a conservative argument for raising the minimum wage and it really should stand in front of the hypocrisy of wanting to slash food stamps and while denying a living wage.

According to The American Conservative, "With Americans still trapped in the fifth year of our Great Recession, and median personal income having been essentially stagnant for forty years, perhaps we should finally admit that decades of economic policies have largely failed."

Moreover, it has been proven to work in Florida among other places. According to a study called The Florida Minimum Wage: Good for Workers, Good for the Economy. "In Florida, where voters approved an increase in 2004, a follow-up comprehensive study confirms a strong economy with increased employment above previous years in Florida and better than in the U.S. as a whole."

Conservatives who want to raise minimum wage are out there and agree that it would "increases the standard of living of workers, reduces poverty, reduces inequality, boosts morale and forces businesses to be more efficient."

We have some of the lowest minimum wages among industrialized countries. Time for some folks to rethink thier resistance to change.

Has anybody noticed what happens to groceries and restaurant prices when the minimum wage goes up? Seems like we're in the world of seven dollar burgers now. Why not raise the minimum wage to make the price fifty dollars. Seems like false gains to me.

Williams is supposed to be an economist, right? So where are the numbers? How many minimum wage employees are affected by this? Aren't small employers exempt? And isn't small business employing more workers than larger businesses -- it's said that most job creation is by small business?

Yes, there is a ripple effect, but I suspect the only direct effect is on companies like WalMart and McDonalds who have a lot of minimum wage employees. There will still be employment opportunities with small businesses at the old minimum wage.

Expectations are another matter, but expectations are one reason for high unemployment rates among black youth.

Interestingly, many workers are paid little or nothing for an hourly wage right now. Waiters and waitresses at non-chain restaurants for example may work only for tips, so I'm told. Some maids at motels & hotels. Cruise line janitorial staff.